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For-Profit Colleges Rake in Millions From Post-9/11 G.I. Bill

The University of Phoenix Online tops the list of schools receiving money from the Post 9-/11 G.I. Bill in its first year. Overall, for-profit colleges collected $640 million from the bill. Public colleges and universities received $697 million but the money went to more than twice as many students.

For-profit universities collected about $640 million from the Post-9/11 G.I. Bill in its first year, according to a new U.S. Senate committee report. The boost to for-profits came at a time when the sector was subject to criticism for poor results and for leaving many students with unmanageable debts.

By aggressively recruiting members of the military, the schools have tapped a rich new source of government cash, in addition to the billions they've already absorbed from the federal Pell Grant program, according to Sen. Tom Harkin, D-Iowa, whose committee has been investigating alleged abuses at for-profit colleges.

ProPublica has posted a list from the Department of Veterans Affairs of the 500 schools that received the most Post-9/11 G.I. Bill funds. (For the list of all schools, contact Sharona Coutts at Sharona.Coutts@propublica.org.)

Recent government reports have highlighted problems at for-profit colleges, including recruiters lying to prospective students about the cost of courses, whether credits would transfer and future job prospects. The schools are under fire from the Department of Education for poor graduation rates.

"The for-profit colleges are rife with misleading recruitment practices, they are expensive to attend, they have huge profits, and have atrocious withdrawal rates," Harkin said. "This raises serious questions about the share of military benefits that go to schools that have very poor outcomes."

A spokesman for the industry said that any problems should be addressed "thoroughly and completely" but took issue with the report's conclusion. "The rapid growth of service members, veterans and their families in higher education is a very positive development that should be celebrated, not denigrated," said Harris Miller, president of the Association of Private Sector Colleges and Universities.

The University of Phoenix Online campus topped the list of recipients at $35 million.

"Veterans chose University of Phoenix because the university meets their needs," said Manny Rivera, the school's spokesman, referring to the flexible schedules and focus on online learning that the school provides.

The Post-9/11 G.I. Bill provides funds to soldiers and veterans to pay for education or vocational training, and came into effect on Aug. 1, 2009. As of September 2010, the V.A. had issued nearly $5 billion in benefits to over 350,000 recipients, according to spokesman Drew Brookie.

More than 36 percent of Post-9/11 G.I. Bill tuition funding was spent at for-profit schools during that time, even though fewer than a quarter of G.I. Bill students attended those schools, according to the report.

Public universities and colleges received a similar amount from the program -- $697 million -- but the money went to more than twice as many students, the report says.

The Department of Veterans Affairs is looking into ways to bolster oversight of how the veterans' funds are used, according to spokeswoman Katie Roberts.

The V.A. does not have direct authority over schools, said Roberts, and relies on state agencies to police their quality. But the V.A. is able to revoke access to its funding at an individual campus when problems arise, and it has done so in the case of some for-profit schools, Roberts said.

Harkin said that the Senate Health, Education, Labor and Pensions Committee will continue its investigations into for-profit colleges and that he expected legislative action would be required to rein in some of the abuses in the sector.

The Department of Education has already taken steps to tighten regulation of the schools, with many of those changes set to take effect next year.

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